Before you dive into looking for properties to buy as a short term rental investment, it's a good idea to have a basic understanding of the rules and regulations surrounding STRs in greater Austin. First things first, what exactly is a short term rental? From a regulations stand point, a short term rental is a property that is leased for less than 30 days.
In Texas, short term rental oversight is primarily left to the cities. Different municipalities can decide how they would like to regulate short term rentals or if they want to regulate them at all. Properties located outside of the city limits therefore do not have to comply with municipal rules. Short term rental use can also be restricted by home owner's associations or the deed restrictions for a given parcel of land. Thus, even if a city permits short term rentals, you may not be able to use a home as an airbnb if the HOA or deed restrictions prohibit leasing less than 30 days.
Where you decide to invest may also be determined by how you plan to use the property. Will this be a purely investment purchase or are you looking for a property you can live in and then airbnb while you are away? Some cities, like Austin, have rules regarding short term rental use that is linked to the type of ownership. It's not uncommon to see rules prohibiting STR use for those not claiming the home as their primary residence.
Where you can legally airbnb is also often based on the property type. Cities often regulate condos and multifamily properties differently than a single family house.
If you're looking for a property to use as a glamping destination you'll want to pay attention to the zoning and make sure you can have multiple tiny homes on the property.
Before you start your search it's best to have an understanding of these different regulations and nuances so you can make sure you're looking in the best places for your specific needs.
Below you will find a breakdown of the different rules and regulations for short term rental use throughout central Texas. You can also use this handy map to see what jurisdiction a property is located within.
Austin City Limits
​
The City of Austin breaks down short-term rentals into three types:
- Type 1 (owner occupied)
-Type 2 (non-owner occupied)
-Type 3 (multi-family)
At this time, the City of Austin isn't issuing any Type 2 permits for single-family, investor-owned homes EXCEPT in the following zoning districts: Central Business District (CBD), Downtown Mixed Use (DMU), Planned Unit Development (PUD), General-Retail - Mixed Use (GR-MU), Commercial Services - Mixed Use (CS-MU), Commercial Services - Vertical Mixed Use (CS-V), General Retail - Vertical Mixed Use (GR-V)
STR permits are being issued for Type 3, multifamily properties i.e. condos. There are caps on the number of STRs allowed in each condo building. If the condo is located in a residentially zoned area the maximum number of units that can have a Type 3 permit is 3% of the total units in the condo building. For condos located in commercially zoned areas, the max number of STR permits is 20% of total units.
STR permits can be issued for single family homes where the owner has a homestead exemption on the subject property. These permits are used when you live in the home, and want to rent out the entire home from time to time, OR if you only want to rent out part of the home ie. a room or guest house on the property.
- Link to more info on COA regulations
Central Texas
Texas leaves short term rental oversight to the local government. Thus, STR rules, regulations or ordinances are predominantly created by local municipalities. If a property is located in an unincorporated area or an extraterritorial jurisdiction, it's highly unlikely that there will be municipal regulations since there is no city that has the authority to regulate the area. However, if it is located within a city's jurisdiction you will want to ensure the property is eligible to be operated as a short term rental. ​
STEP 1: DETERMINE JURISDICTION
If you identify a property you think can work as an STR, your first step should be to determine what city the property is located in. Just because the address says Austin, doesn't mean the property is located in the city limits of Austin. Go to the closest cities GIS map to determine if it is that city's jurisdiction. If it is, you'll want to know what STR rules they have in place.
STEP 2: FIND APPLICABLE RULES
Rules and regulations surrounding short term rentals in Central Texas are constantly changing. That being said, we do our best to keep a pulse of the current rules for Austin and its surrounding suburbs. We consistently monitor the rules and regulation surrounding short term rentals in Austin, Bee Cave, Cedar Park, Driftwood, Dripping Springs, Fredericksburg, Georgetown, Johnson City, Jonestown, Lago Vista, Lakeway, Leander, Pfluggerville, Round Rock and many other areas throughout Central Texas. This information has taken years to compile, and is updated regularly. Visit our areas page to see which Austin suburbs will work for your airbnb purchase.
Condos
Buying a condo to use as a short term rental makes sense. You don't have to worry about things like lawn care, and roof maintenance, and the condo may even offer amenities that appeal to guests. However, not all condos allow short term rentals. In fact, most do not. If you want to buy a condo to use as a short term rental, you should obtain a copy of the condo documents. These documents will include all restrictions and rules, and most often will state the minimum rental length requirements.
If you find a condo where STR use is permitted, you will still want to confirm the municipality allows short term rentals. Laws vary from one city to the next. In the city limits of Austin, it is still possible to purchase a condo to use as a short term rental even if it's not your primary residence.
​Austin allocates condo STR permits according to the zoning of the property. You will need to first verify how the condo is zoned, how many units are in the condo project, and how many active permits have been issued already. The City of Austin stipulates a maximum of investor owned permits per condo building:
- 3% allowed per building if zoned residential
- ​25% per building if its zoned commercial
Properties outside of the city limits that can be used as full time airbnbs.
City of Austin homes that would make great airbnbs for primary occupants.
Properties that would make great glamping destination retreats.
Condos that don't prohibit short term rental use.
Sign in with your email address
Enter your email address
Please wait...
You’re being redirected to the page with listing data.
